Bay lawyers say illegally detained prisoners deserve compensation although Prime Minister John Key has confirmed legislation that would block compensation claims was "possible".
The Supreme Court last week ruled that Corrections had been misinterpreting the law around what counts as "time served" - meaning hundreds and possibly thousands of offenders had been jailed for too long.
The lawyer for one of the two men who took the appeal said his client would pursue compensation for wrongful imprisonment.
Because the issue dates back to 2002, the Government could face a bill in the millions.
Tauranga criminal barrister Tony Balme said on a pro-rata basis there potentially could be hundreds of Bay of Plenty people affected by the Supreme Court's ruling.
"It's a remarkable state of affairs," he said.
"It seems the Government was hoping the Supreme Court would rule in Corrections' favour. They chose to roll the dice and lost. It's not rocket science, of course affected prisoners should be compensated it's only fair to do so."
Senior Tauranga defence lawyer Bill Nabney agreed.
"How would you feel if you spent even one extra day in jail than you should have. Of course there should be compensation."
Tauranga criminal barrister Peter Attwood said it was a question of fairness, and holding a government department accountable for what was clearly a systemic failure.
"The reality is that, should affected people not be compensated, then it would really create an issue of angst for those who have been illegally detained and further alienate the public."
Ken Evans, Tauranga spokesman for Sensible Sentencing Trust, said the question of compensation was not something the trust would comment on.
"The Sensible Sentencing Trust believes that prisoners should serve every day of their sentence given by a judge before they are released, " he said.
Prime Minister John Key said it was "very uncertain" whether compensation should or could be paid.
Legislation that would block compensation claims from prisoners who spent too long in jail was possible, Mr Key said.
"It's a possibility, but I wouldn't say necessarily a probability at this point," Mr Key said
Retrospective legislation that would remove any obligation to pay compensation was yet to be considered.
The Parole Act
The Parole Act 2002 specifies how and when offenders are released from prison. It also set up the New Zealand Parole Board whose main functions are to make decisions about the release of offenders on parole and to set release conditions for offenders released on parole or at the end of their sentence.